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June 11, 2014

Australia's Future Submarine - Swedish vs German Claims

This article, Saab Story: Sweden's New Submarines, June 10, 2014, http://www.defenseindustrydaily.com/saab-story-swedens-new-submarines-024760/ appears to have been inserted by Saab and maybe the Swedish Government to understandably increase the chances that Australia's future submarine will be designed and partly built in Sweden. Japan's Soryu propulsion system is of course being considered by Australia and US input, or at least Lockheed Martin's, has for years been considered for the combat system. All may be even more complicated and multi-country than the Collins' deals 1980s-2000s. The article however seems to avoid the issue that if TKMS still owns Kockums (as indicated here http://www.kockums.se/en/ ) then TKMS through Kockums retains many intellectual property rights that Sweden-Saab assumes are Sweden's rights. Intellectual property like the Stirling engine may be used in Australia's future submarine. But who owns the the intellectual property rights to the Soryu's Stirling engine and separately does Germany mostly own the licensing rights to the Soryu's diesel? Sweden-Saab? Germany-TKMS-Kockums as it applies to Japan? Where do Japan's submarine builders, Mitsubishi and Kawasaki, stand? It all needs to be clarified by German, Swedish, Japanese and Australian lawyers, businessmen and politicians. See also "The reported Swedish solution would buy [Australia's] ASC" below.Here are the relevant parts of the article which is on the Defense Industry Daily website http://www.defenseindustrydaily.com/saab-story-swedens-new-submarines-024760/ :

Saab Story: Sweden’s New Submarines

Jun 10, 2014 18:46 UTC by Defense Industry Daily staff

.... In order to field their next-generation design, however, Sweden may have to do something unusual: partner with other countries…

....The A26 will be equipped with an air-independent propulsion (AIP) supplement to its diesel-electric systems,...

“Both parties agree that during the negotiations phase, the integrity and the operating ability of ThyssenKrupp Marine Systems AB must be safeguarded. The transaction will be subject to regulatory approval. The negotiations between Saab AB and ThyssenKrupp Marine Systems AB are at an early stage and more information will follow.”

There’s a major backstory here. Sweden’s FMV effectively raided TKMS’ offices in Malmo “to take sensitive technological equipment,” but FMV says that since “…it was a transfer of defence material, belonging to FMV, all information regarding the transfer is classified as secret”. It’s generally believed that they came and took the A26 submarine’s plans, as well as a complete Stirling Air-Independent Propulsion system, which are technically owned by the Swedish state. [does Germany-TKMS agree it is legally owned by Sweden?]. A country that believes time is of the essence, and doesn’t want what it perceives as a hostile corporation to have leverage from holding state materials, might be inclined to move swiftly. The very fact that this happened speaks to how badly relations between Sweden and TKMS have deteriorated.

April 12, [2014]: Australia. The Collins Class was built around a Swedish design, and News Corp Australia says that Saab and the Swedish Government have been engaged in secret talks around a new joint submarine effort. That proposed approach may have the potential to cut through many of the dilemmas faced by Australia’s government, and Sweden’s as well....

The reported Swedish solution would buy [Australia's] ASC,and embark on a fully cooperative joint design for Sweden and Australia’s next submarines. Australia would receive a design that’s explicitly built for Australia’s needs – a necessary compromise for Sweden, whose needs are different. It’s also worth noting that the Japanese Soryu Class propulsion system which is attracting so much interest from Australia’s Navy is part Swedish. From industry’s point of view, making ASC part of Saab removes any conflict of interests with a foreign firm that acts as the project lead, creating both development jobs/skills, and production work. From the politicians’ point of view, a program that includes Sweden and Australia offers the added security of shared risk, and shared acquisitions.

Sweden is looking to re-establish an independent submarine industry (q.v. March 26/14), and their challenge will be buying enough talent, building an equivalent production workforce, and designing the new sub within Sweden’s budgets. Australia offers Sweden a development partner, and a workforce with good experience...."

PETE'S COMMENT

This whole matter still seems a political and legal mess or challenge, at least. If TKMS looks like it would lose Australia's future tender to build Australia's future submarine then TKMS will construct legal intellectual property right obstructions to make it very difficult for Saab to smoothly win the tender.

29 comments:

June 9, the Swedish government officialy ordered the new Swedish submarines from SAAB. submarine NG (next generation) is closely connected to the former A26 concept.http://mobil.svd.se/c.jsp;jsessionid=F553B28D0ECD5233E5DF9CC934C5E2C2.sonny4?cid=25991131&rssId=&item=http%3a%2f%2fwww.svd.se%2fnaringsliv%2f%3fservice%3dmobile%26amp%3barticleId%3d3459832%26amp%3bsidan%3d15

Thanks for http://mobil.svd.se/c.jsp;jsessionid=F553B28D0ECD5233E5DF9CC934C5E2C2.sonny4?cid=25991131&rssId=&item=http%3a%2f%2fwww.svd.se%2fnaringsliv%2f%3fservice%3dmobile%26amp%3barticleId%3d3459832%26amp%3bsidan%3d15

Good that the Swedish submarine industry is making progress.

The key paragraphs include the last two - in translation:

"But there have also been reports from Germany that the German government wants to ensure that no secret German engine technology is lost to Sweden in a sale..."

About ThyssenKrupp sells its Swedish submarine operations to Saab so it will be a direct competitive activity, although the Swedish and German submarines use different engine technologies."

I think that until Kockum's is bought by Sweden-Saab there will be ongoing legal and political problems. Australia's ability to buy the Soryu propulsion system, which combines Swedish and German secrets, will be impaired.

Having been out of Europe for some time I´m not very updated but I support basically the comment from morten. When TKMS cliam about their worries it just generated confusion. It´s very unclar whatkind of intellectual property the Germans are referring to. On the other hand there are speculations that there might be an German interest to hamper the process.BUT, as it was pointed out in local media TKMS don´t have the best hand here: Karskronavarvet has been Sweden’s major naval shipyard since hundreds of years. The are need renovation and recently environmental severe damages from ancient time until today was revealed. The reparations and sanctification will come on the owner OR as SAAB has said it, that a change of ownership might be a good time for the state to take it´s responsibility for the time when the yard was in the hand of the state (= we will take over the future, you pay for the past).As a local newspaper said, RMKS will not sell with a joyful heart, but basically the choice is sell it as fast as possible and get some money from it, delay the process and the low price will go to zero, and then to losses. And as SAAB now seems to have the staff in their hand, and FMV has the intellectual property they can always start a new yard. While TKMS would be stuck with an environmental disaster, with a yard in a military area where any activities need permit, where the navy likely will not place any order….Will they sell, yes ! Has the Swedish state been fair and nice to them, no ! Will it give any negative consequences for Swedish industry, No! (I basically only have hard the version that HDW/TKMS set the level of this battle by trying to sink Kockums)

Sorry for the really sloppy spelling in the last posting! Posted it from my phone where you just see a part of the text, and with the crappiest speiiling program in the known part of universe..... //Joakim

I wonder if the Germans are referring intellectual property for submarine diesel, drive system electronics or propellers? The Germans would have at least $20 billion worth of reasosn to hamper a Swedish-Saab win of an Australian Future Submarine tender.

If Australia ASC looked to be privatized I would guess TKMS might be as interested as Sweden-Saab in buying a major share of ASC?

I'm gaining a picture that in the Swedish city of http://en.wikipedia.org/wiki/Karlskrona is Sweden's largest (Karlskrona) Naval Base and within the base is the major naval (submarine-shipbuilding) yard of Karskronavarvet.

What type of pollution is effecting Karskronavarvet? I looked at http://toxtown.nlm.nih.gov/text_version/locations.php?id=54 and it explained:

"Because shipyards are located on the water, pollution created by shipyard activities can fall into the water directly or be carried in by runoff. Shipbuilding and ship repair use toxic chemicals including chromium, copper, nickel, and lead [and mercury?]."

Saab seems to have a huge expensive task and costs. Saab needs to learn the special skills and program management of building submarines? Perhaps Saab also needs to construct a new shipyard to build submarines?

you wrote"Problem is ..they [TKMS] dont really have any...all relevant and sensitive technologies like the stirling engine, combat system,and signature reduction technologies, all belong to FMV( ie. the Swedish state) and NOT kockums."

You mentioned several points we should have a closer look at.

Sterling enginesThis is a rather old technology. Just the implementation on submarines could belong to FMV. It is also not obvious what improvements TKMS did invent for Japanese Sōryū-class submarines. These rights would belong to TKMS.

How could FMV own IP rights on developments paid for by Japan?

Combat systemTKMS did use for the first batch of Type 212 submarines a Norwegian Kongsberg system and for the second batch an Atlas Elektroniks combat system.

Ssignature reduction technologiesThe Type 212/214 submarines are also quite good on that field.

TKMS is still producing submarines while Kockums did since 1995 just overhaul older submarines.

Well, it´s not propellers or drivetrains as the Sweden has their own FMW-protected tech here. Could be the MTU´s diesel submarine modifications, but I´m not really convinced that is so advanced that it needs specific protection (But, despite having a marine engineer officer background I must confess I have only been on sub´s as a visitor, some modifications on pressure valves etc. might be more sensitive than I assume).

But yes, as indicated I also assume the marked division at HDW/TK have literally billions of reasons to find as many delaying factors as possible for SAAB to bring Kockums alive as an independent actor.However the financial department at TK might have a reversed interest to get rid of an unusable and expensive facility asap. Just as you say it´s located inside the protected base area of the naval base and the operator needs permission for whatever they do and it seems clear that the navy will not be a good customer before the shift in ownership takes place

At https://www.google.se/maps/place/Karlskronavarvet/@56.1584766,15.5716689,1136m/data=!3m1!1e3!4m2!3m1!1s0x46566dadb745d8d9:0x21b4323e1ec73615 you will get a nice picture of the yard including the old 5-finger dock system, then you will actually see how the yard continues into the naval base to the east. If you´re in to naval history if can conclude the lesson that “Karlskronavarvet” was the workplace of one of the most famous shipbuilders ever ( http://en.wikipedia.org/wiki/Fredrik_Henrik_af_Chapman ) and Karlskrona was the home port to one of the biggest navies in the world. OK, my friend, this was totally out of context, back to subject ;-)

Regarding pollution I think you had a quite relevant link, the yard has been active for nearly 400 years and operated by the navy/state for most of the time. You can probably find any thinkable health risk especially regarding metals, lubricants and asbestos, I also think they manufactured explosives during many pre-environmental care decades, also not the most nature friendly business. But as said it seem like SAAB possible look for a deal when the state clean the facility and they start the production.

But, we don´t need to exaggerate the problem to finding a production berth. The underground naval base of Muskö (https://www.google.se/maps/place/Musk%C3%B6+%C3%B6rlogsbas/@58.9862631,18.0622586,2102m/data=!3m1!1e3!4m2!3m1!1s0x465f60f1a082a21f:0x30e84714aeaf34fb ) with it´s enormous indoor shipyard is still owned by the state has an advanced submarine facility where they do a lot of the submarine longtime overhaul today ( http://www.aff.a.se/vf2005_4/Debatt%20Okonor%20sid%2016-filer/image001.jpg ) (the first tunnel to the west from the base is the submarine entrance, just south of the entrance to the 2 larger destroyer tunnels) and has also been mentioned as a place to let SAAB build subs.

You are probably more than right that HDW/TK will be as interested in ASC as ever SAAB would be. This is of course only me making assumptions, but the story of Kockums and the HWD/TK takeover is no well known in the international naval industry and my guess is that it do not speak to the advantage of HDW/TK. I assume Sweden will claim that they are a better partner as Australia need more independence, and that would not be a problem for SAAB. While they will claim HDW has proven to be very negative to their subsidiaries to work with independent solutions that might compete with their own standard solutions.

However, a hard fact is the different strategic needs. HDW is a leading export yard with need´s to standardize as they have the main aim to export. Sweden are not in desperate need expand their submarine industry via export, but to find 1 or 2 countries also interested in independent submarine development as Sweden’s military doctrine can not accept being dependent on external suppliers, and that they need Sub´s with specifications HDW don´t supply today (from a Swedish perspective it´s not only the AIP, but for example the shock resistance that must be more advanced for littoral actions where you might be subjected to explosives in shallow water).As you might have read a MSP-feature of A26 was to take survivability to new levels.

Well I think HDW/TK did a very efficient work to kill Kockums and the time to turn the clock back will speak against SAAB-Kockums. If SAAB, get the operation back on track they have a few other factors speaking to their advantage, I would for example guess that Australia could benefit from the greater technical freedom that SAAB/Sweden likely would allow.

But I wonder if the SAAB/Kockums vs. HDW/TK is the right question today. I see japan coming up as the main conteder, already building the type of boats Australia seems to look for…. or ??

it is quite obvious that more independence didn't worked for Australian submarines at first time. My opinion is Australia needs a strong partner who will tell them not to mess around with "special solutions".

About the MSP feature of the jet to build A26: just PR.

The German submarines operate just like their Swedish counterparts in the Baltic Sea (greatest depth 459 m). Type 212 was built to sustain greater depths in the Mediterranean Sea (greatest depth 5267 m). The Type 212 is constructed for a depth of 700 m.

Shock prove constructionGuess which country has the most live firing experience how to build a submarine shock resistant.

Japan like South Korea do build submarines in a pragmatic way: they build and construct what they can and then someone else offers something better they buy it.

The Australian way was to do everything on their own and they failed.

Australia is decades behind with their submarines. 3 nations in the Pacific already have submarines with AIP. At the current speed Australia won't get AIP within 20 years.

Thanks for the Karlskronavarvet map and the link to http://en.wikipedia.org/wiki/Fredrik_Henrik_af_Chapman. Chapman, an Anglo-Swede, was certainly enterprising.

Muskö naval base is fascinating. This link http://en.wikipedia.org/wiki/Musk%C3%B6_naval_base indicates Kockums partly operates Musko. With Kockums also having naval interests in Karlskronavarvet and Malmo TKMS can hinder Swedish sub renovatons and construction until Kockums is returned to Swedish control.

Yes, whoever buys ASC (maybe TKMS, DCNS or Saab) will assume they have bought the tender for Australia’s future submarine. Australian politicians might think that selling ASC to a foreign submarine company will be financially beneficial but the foreign sub company will need to recoup the ASC cost through charging Australia higher prices for the subs.

Japan may possibly become a competitor to build the whole Australian future sub and Australia should not exclude DCNS too early.

Australia did indeed suffer from inexperience when building the Collins. Part of the problem was a rushed tender process.

Also neither Australia nor Kockums clearly identified some aspects of the Collins that were unsuitable for Australia operating circumstances. This applied particularly to the diesels and 20+ oil tanks. These diesels-tanks may have been sufficient for short-range, less salty Baltic conditions - but unsuitable for the huge oceanic distances the Collins needed-needs to travel.

Australia has an even wider acquisitions cost schedule problem than the F-35. Australia wants to buy-build 8 new frigates which may weigh 7,000 tonnes each - see http://www.defence.gov.au/dmo/id/dcp/html_dec10/sea/Sea5000.html making them as heavy as the 3 unfinished Air Warfare Destroyers .

This may push back the Future submarine acquisitions project years longer than expected.

You might have notices that everybody else mentions both pro´s and con´s with different solutions. That´s called analyze.When you vigorously argue for the advantages with one solution, and claim that there are no downsides, it’s called marketing.

You are of course welcome to do the marketing for HDW, but my humble experience is actually that there are no perfect systems and that most ships (or my former department propulsion) are compromises where one advantage generally generates a disadvantage somewhere else. I’m actually not a friend at all of the arms industry and have no interest in whoever win this deal except being a technical freak with marine background, and an interest in security politics as I today work with analyze, and have worked in many conflict areas. This is also why I think it’s interesting to discuss both pro´s and con´s.

You are clear on your opinion that Australia needs someone to tell them what to do, you might be right, …but I think their own view is the interesting factor to understand. My thought would be that Australia 2014 is not Australia 1987 and most governments (logically or not) are very keen on independence, they consider national interests like labour market perspectives (just like Germany did trying to close down the Swedish submarine and move it to Kiel) .This is why I think that one of the factors in favour of SAAB/Kockums is actually the aftermath of the Kockums/HDW/TK saga. Yes, they thwarted a competitor, but also turned our to be the owner from hell in respect to technical solutions, in respect to political independence, in respect to local employees etc…

Like I have said earlier, I actually share the view that HDW has probably been extremely successful in pushing Kockums out of business (basically not allowing them to offer, or restricting any offer, since the German takeover), and that will probably overshadow most other aspects. But still from a technical point of view the fact remains not even HDW themselves trusted their products to be the first choice in an open competition.

First, my congratulations to a splendid game aganist Holland, Australia should have deserved better outcome from the game they did. Next time !!

Yes Muskö is a fascinating place. I´m old enough to have seen the Halland-class missile destroyers in the mountain. Especially to enter the dock area and see the full height of the big ships dry in a mountain room totally eclipsed any James Bond Movie at the time.And the feeling to enter or leave the tunnels from the sea is stunning, the contrast with the beautiful innocent landscape outside with just the discrete openings, and then the contrast to the facilities, activities and atmosphere inside.

However, you are right Kockums has activities at Muskö. But they are one among many operators renting dock time in the service area, so they are not in the position to block any facilities like in Karlskrona.

Thanks, I have to say Australia has lost to Croatia (3-1) and Netherlands (3-2) but we're up there scoring against such good teams. I'm hoping there will be an upset when Australia plays under-performing Spain. Overall I think Australia has done well given the high standards of Group B http://en.wikipedia.org/wiki/2014_FIFA_World_Cup_Group_B .

I'll next write about the German submarine industry and compare HDW subs with France's DCNS subs. That will be on Monday.

I argue from a German point of view because I can read information about German submarines far more ease in German than in French. DCNS builds also good submarines. I guess we discuss that soon.

What work did Kockums since 1995? Södermanland-class in 2003 to 2004 and Archer-class for Singapore from 2005 to 2013.

The thing about Kockums is quite easy. Without HDW Kockums would have been gone alonge time ago. Why do you think Kockums sold was at all?

I am looking at the SEA1000 problem as a taxpayer. The Australian taxpayer deserve protection at considerable costs. To build an indigenous submarines is just craving for status.

South Korea wasn't looking for that. South Korea was looking for a solution. Therefore I argue against a Swedish solution because Sweden can't offer a working solution right at the moment. Sweden can just offer some CGIs.

Does Australia build indigenous air warfare destroyer with indigenous equipment? Indigenous Landing helicopter dock? Indigenous Fighter aircraft? I guess it is far more easy to conceal a non working submarine than a non flying aircraft.

The indigenous solution with Sweden as a "supporting" partner stands for the greed of a small bunch of crooks. It is the easiest way to drain the money out of such a project then you don't have to cross a border.

Just compare how many submarines Kockums did build or license build since 1995 in contrast to HDW or DCNS. Kockums is just the easiest way to conceal costs.

Regards,

MHalblaub

P.S.: It's easier to write only about HDW instead of DCNS and HDW at once.

When having lunch with my first wife at Watson's Bay in Sydney I witnessed the surprising site of an Australian Oberon submarine passing through Sydney Heads and diving beneath the waves into the Pacific Ocean.

Its as if no-one else saw it - perhaps because none were mentally ready for it.

Thanks for a fascinating blog but I'm really curious as to why the importance of US tech in Australia's submarine choice is not acknowledged in any of these posts or comments (sorry if I've missed anything). My insider tells me there is NO CHOICE but to go with Swedes because the Americans DO NOT do third party deals and sub data and tech is among their most sensitive and tightly held. They've already accepted Australia's use of Swedish design however so could be expected to go with it again. They do not trust the French, Germans or Spanish so no go there. Have no idea what their view on the Japanese would be but the Japanese have nothing new or unique as far as I'm aware - the engine is modified French and Aust can get that expertise elsewhere - really don't see why they need the Japanese?

(Google translated)SAAB TAKE KOCKUMS Saab is close to walk home with the purchase of the Thyssen Krupp-owned shipyard, and if all goes according to plan, an announcement is expected within the next few days.The price tag is well below what the Germans wanted, according to sources. The German company should have liked to have 1.3 to 1.4 billion for Kockums, but according to the magazine's information, the price seems to end below a billion. Several sources point to a price down to 500 million kronor. Saab signed in the middle of April a non-binding letter of intent to acquire Kockums, or Thyssen Krupp Marine Systems as it is formally called, from Thyssen Krupp. (DI)

Submarine Matters

Director, Submarine Matters International. I analyse international trends, technical and political - mainly on submarines, sometimes on surface ships, aircraft, missiles and their nuclear warheads. This website started in 2007. I have a Masters Degree (International Relations (Strategic Studies)) High Distinction average. I'm happy to do research projects commissioned by consultancies, etc. The best way to navigate this site is to put a keyword in the search box top left corner.